Problem 14.7 $ 9,00,000 90,000 By Sales By Closing stock Profit and Loss Account of MN Ltd for the year ended 31 March 2012 $ To Opening stock 90,000 To Purchases 5,60,000 To Wages 2,14,000 To Gross Profit 1,26,000 9,90,000 To Salaries 16,000 By Gross profit To Electricity 10,000 To Misc. expenses 10,000 To Depreciation 30,000 To Net profit 60,000 1,26,000 9,90,000 1,26,000 1,26,000 $ Liabilities Equity share capital Reserves and surplus Secured loans Creditors Balance Sheet of MN Ltd as on 31 March 2012 $ 1,80,000 Fixed assets 5,40,000 1,20,000 Less: Depreciation 1,50,000 2,10,000 Stock 90,000 Debtors Cash 6,00,000 3,90,000 90,000 1,05,000 15,000 6,00,000 Discuss under the following important functional grouping, the usual ratios and comment on the financial strength and weakness: (1) Liquidity and solvency ratios; and (ii) Profitability test ratios